Not Just for Music

Companies outside the entertainment industry, meanwhile, are testing digital content controls to see if they can generate new customer leads. Houston-based financial services firm Simmons & Company International, for example, is tracking who is getting its buy/sell recommendations over the Web for free. Explains IT vice president Lenny Schad: "We can follow the path of our reports online to get an idea of potential customers."

Joshua Duhl, a senior consultant with technology researcher IDC, predicts a rise of nearly 60 percent in sales of digital content control software over the next four years, to almost $1 billion by 2006. Driving those numbers, Duhl says, is the recent and aggressive push by heavy-hitters like IBM and Microsoft Corp. to create, test and market the new technologies.

And momentum is growing in other ways. In February, IBM opened what it calls its Digital Media Factory to develop new digital content controls for diverse types of companies, from hospitals in need of ways to transmit sensitive data online in compliance with new federal privacy rules, to airline makers wanting to transmit jetliner safety data from field inspectors to headquarters without leaks to rivals. "Napster and the MP3 revolution lit a fire under the entertainment industry, but it also woke up other types of businesses to the consequences of failing to keep control of some information," says IBM's Burnett. "Executives are starting to think about how they're going to allow for distribution of digital content within their worlds. What should we do as our content and capabilities move increasingly to the Net or to a digital platform? Content controls will enable us to create whole new business models." Jeffrey Hunker, dean of the H. John Heinz III School of Public Policy and Management at Carnegie Mellon University, agrees, adding: "The whole issue of digital data controls is one of a handful of the most important issues that will shape the nature of IT as a foundation for our economy and society."

To be sure, many people still don't believe that sharing files over the Web constitutes piracy or that there should be restrictions on what is distributed there. You can give a friend a CD; why shouldn't you be able to share it online? But companies that aren't experimenting with new control technologies could be hurting themselves, says Mike McGuire, emerging technologies and platforms analyst with Gartner Inc. "If it's on your network, and it's your property or someone else's, you're going to be dealing with digital content controls, either now or later," he says.